Article published in Transport Policy

Tano Kannegiesser and Dr. habil. Stefan Tscharaktschiew have published an article titled “Cost-Benefit Analysis of Age-Based Screening for Driving License Renewal” in the journal Transport Policy. The abstract of the publication is provided below:

"As older car drivers are often seen as unsafe, several countries employ Age-based Screening (ABS). This road safety policy shortens the driving license validity based on age and makes renewal conditional on medical examinations. While the scientific literature struggles to identify conclusive road-safety improvements from ABS, it is continuously used in many countries. This paper is the first to perform a comprehensive Cost–Benefit Analysis of ABS, thereby improving policymakers’ understanding of its welfare implications. Specifically, we investigate a hypothetical ABS introduction in Germany that mirrors common EU practice (screening from age 65 every 5 years; medical exam at a general practitioner; €25 fee). In a first step, we empirically derive two key input parameters: the number of driving licenses revoked annually and the resulting annual mileage reduction. Then, we use this information to quantify primary and secondary market effects of ABS by calculating changes in social opportunity cost, consumer surplus, transport externalities, and government revenue. Finally, we develop a strategy to discount the policy’s future benefits and costs to account for the fact that some impacts of ABS vary over time and are dynamic due to specific age-cohort effects. Crucially, rather than presenting a single deterministic result, our primary finding evaluates the welfare implications of ABS as a continuous function of its effectiveness at reducing the average risk posed by senior drivers subject to ABS (intensive safety margin), the most critical factor in our study. Our model demonstrates that ABS is welfare-enhancing only if it is overwhelmingly successful at identifying and removing highly unsafe drivers, requiring a safety improvement at the intensive margin that exceeds the official share of crashes attributed to impairments among senior drivers. Conversely, in a baseline scenario where safety improves only through reduced driving owing to license revocation (extensive safety margin) - mirroring the empirical literature’s inability to detect broader safety improvements at the intensive margin - the Net Present Value of the policy is −€761 million (2024 €; BCR of −6.0). This welfare impact would recur every year ABS is employed and corresponds to a welfare loss of around €15,000 per revoked driving license. The negative welfare conclusions hold in 68% of draws in a Monte-Carlo simulation, even when allowing for potential safety improvements. We conclude that ABS is only economically efficient if it provides substantial road safety improvements. Hence, although real-world licensing policies might reflect considerations beyond economic efficiency, policymakers should reevaluate the use of general ABS in light of contemporary scientific evidence."